Tuesday, June 24, 2008

SCOMI Marine to tap Vietnam oil transport business

SCOMI Marine Bhd, a marine logistics and offshore support services firm, is banking on its 20 per cent-owned joint-venture (JV) company to tap the transportation segment of the booming oil and gas industry in Vietnam.

Scomi Marine chief executive officer Shah Hakim Zain said the joint-venture company in Vietnam plans to own five clean petroleum product (CPP) vessels in the next three or four years.

"We are finalising terms with our partner to co-own our first CPP tanker, costing about US$55 million (RM179.3 million). We expect to conclude talks in a month or two," he said after Scomi Marine's annual general meeting in Kuala Lumpur yesterday.

Scomi Marine recently acquired a 20 per cent equity stake in Southern Petroleum Transportation Joint Venture Co (PV Trans Petro), which will be the main CPP transporter for the proposed refineries being constructed by PetroVietnam (PVN), the national oil company of Vietnam.

Shah Hakim said PVN is building three refineries, and the first, located in Dung Quat, is expected to be completed by 2009. PV Trans Petro is expected to carry 60 per cent of the refinery capacity.

"We are also in talks with PVN on the possibility of the joint- venture company to serve as product transporter for two other refineries," he said.

Shah Hakim said the group is positive on Vietnam as an oil and gas market.

"We have commenced several initiatives with the national oil company of Vietnam and their subsidiaries to look into owning vessels with them.

"We are at various stages of discussions with parties, from memorandum of understandings to finalising participation to co-own vessels.

"Vietnam is a very important and huge market for us. It has potential. In fact, bigger than Malaysia," he said.

Shah Hakim said he expects to see contribution from Scomi Marine's investment in Vietnam by next year, through equity participation.

"We may see revenue contribution from this joint venture this year but only a small portion. We will see more next year," he said.

Apart from the oil and gas sector, he said, the joint-venture company will also try to explore the transportation segment potential in other industries in Vietnam.

"But the current venture in Vietnam will be our first in providing tanker services in the oil and gas industry," he said.